We live in a world where “bigger is better,” but that does not apply to your student loans. If you are considering taking out student loans to pay for your education, it is wise to take the bare minimum you need.
Many students make the mistake of taking whatever loan amount is offered to them or simply going with the one that offers the most money. I mean, who wouldn’t want more money? But what you have to remember is that the more you borrow, the more you will have to pay back. It is important to keep the following in mind:
- The amount you borrow is not necessarily the amount you will pay back. The amount you borrow is only the principal balance – your lender will tack on interest, fees and other charges that can significantly increase the total amount you will be required to repay.
- The amount of your student loan should be what is necessary to pay for your tuition, books and other education-related expenses. This may mean that you need to get a job to cover living expenses and take actions to cut your costs, but it will save you money in the long run.
- If you are trying to decide among several schools, compare the total cost of attending each of them. This includes tuition, books, cost of living, transportation and other expenses. Compare these figures so you are aware of the difference in cost between each college.
- Once you know how much each college you are considering attending will cost, calculate the amount of financial aid offered from each school. This includes scholarships, work programs and student loans. When you subtract this amount from the total cost of attending, is there a gap? If so, how will you come up with this amount?
- Once you have narrowed your choices, it is time to determine whether borrowing the money to attend each school makes sense. In other words, does the school have the programs you need to obtain a degree that will lead to a successful career? Is the amount of debt you must incur reasonable when compared to your potential income after you graduate?
Obtaining your education is one of the wisest investments you can make. However, researching your options and making the smartest decisions you can in advance of taking out your student loans will put you much further ahead than you would otherwise.
If you would like a down-to-earth approach and a lawyer who will listen carefully to all your questions and concern, call DeLadurantey Law Office, LLC, at (414) 377-0518. We serve clients primarily in the areas of student loan law, Chapter 7 and Chapter 13 bankruptcies, debt negotiations and defending foreclosure actions. If you live in the area of Milwaukee, Wisconsin, call us for the debt relief assistance you need. Visit our web site and like us on Facebook.